Students and other supporters of the Sydney College of the Arts gather on the steps of the Art Gallery of NSW in July to protest the college’s merger, which has now been called off.
Photograph: Steph Harmon/The Guardian

The University of Sydney has reneged on its proposed merger of the Sydney College of the Arts with the University of New South Wales following widespread backlash from students, teachers and the wider arts community.

The university’s vice-chancellor, Dr Michael Spence, announced the decision on Thursday afternoon, citing differences in vision between the University of Sydney and UNSW.

Spence said the proposed merger had always been dependent on a clear and achievable vision, shared by both institutions, but “despite the best efforts of all involved”, the two “have a different vision of what a centre of excellence in the visual arts might entail”.

Spence said one of the points of contention was the importance of preserving the SCA’s “distinctive tradition”. He informed the vice-chancellor of UNSW, Prof Ian Jacobs, of his decision to terminate the agreement on Wednesday.

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The uncertain future of the National Art School, which was also to be involved in proposed new arts program, was also a factor in the decision. “We have become increasingly concerned about the adequacy of the facilities available to realise our vision of a centre of excellence,” Spence said.

Jacobs said in a statement that UNSW had entered into negotiations with the University of Sydney in good faith. Though the agreement reached in June was not binding, he said at no point did UNSW back away from any part or from its commitment to making it work.

In 1976, SCA became the first tertiary art school to be established in NSW. Its alumni also include artist Shaun Gladwell, designer Marc Newson and cartoonist Cathy Wilcox.

Current and former students, and other supporters of SCA gathered on the steps of the Art Gallery of NSW on 15 July, coinciding with the Archibald Prize ceremony, to hold a protest against the merger.

Frederico Câmara, a current international student who has been campaigning against the proposed merger, said it reflected the trend towards corporatisation of universities worldwide. He warned that the research coming out of the school, the university’s international reputation and the quality of life in Sydney would suffer with the merger.

“The University of Sydney will have to live with the shameful image that its leaders are casting for itself as a world top-ranking university that does not support the arts,” he said.

The National Association for the Visual Arts had also expressed “very grave concern” in an open letter to the University of Sydney’s senate, warning of the “deleterious consequences for art education in Australia”.

Jamie Parker, the state MP for Balmain, said the proposal seemed more driven by cost saving than excellence in the arts: “Combining these three very different art schools together risks diluting the unique individual strengths of each organisation,” he said.

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The announcement means the 600-odd students currently enrolled at the school will be able to continue their studies, though Spence did signal changes to the program in the future.

The SCA will now become a part of university’s faculty of arts and social sciences and move from its current site in Callan Park in Rozelle to the university’s campus in Camperdown/Darlington from the beginning of next year. The move from Callan Park was confirmed by the university in 2015.

Spence said the University of Sydney would not be accepting new applications for the bachelor of visual arts next year but was optimistic a “re-imagined” program will commence in 2018.

Applications for the master of moving image program will be accepted for a 2017 start.